Tinubu took a big risk by ending fuel subsidy, Alake

The Minister of Solid Minerals, Dele Alake, has said President Bola Tinubu took a big risk by ending the fuel subsidy. He believes this decision is for Nigeria’s long-term economic recovery, even though it has caused immediate hardship and backlash.

Alake spoke about the government’s economic reforms during a session with members of the All Progressives Congress Press Corps in Abuja on Wednesday. He said past governments knew they needed to remove the subsidy but kept postponing the decision because of election fears and how it would affect them politically.

Alake, who was recently named as President Tinubu’s 2027 All Progressives Congress Presidential Campaign Director of Strategic Communications, said Tinubu chose to “take the bullets” for Nigerians by making this tough decision. He argued that there is never a perfect time to make hard economic choices.

He stated that the subsidy mainly helped fuel cartels and wealthy Nigerians. He explained that the government had fewer resources to invest in infrastructure and other key areas of the economy.

He said, “There is no shortcut to genuine reforms. I do not need to elaborate on the fact that we knew what the Nigerian economy was before 2023. And I do not need to inform you that all the reforms and the policies that were and are necessary to correct these distortions and contradictions in the Nigerian society were there and identifiable by those previous governments. The only thing lacking was the courage to take those decisions.

“And there is no shortcut. They say, our elders say, when you are in a hole, what do you do? You stop digging. Because the more you dig, the deeper you sink. But because those previous governments lacked the courage to stop digging for short-term political expedience, they were afraid of elections; they were afraid of bringing them back to office and all that. So they shifted those decisions, the hard decisions they ought to have taken. I recall, and most of you will be aware, many years ago there was this issue of removal of fuel subsidy, which dominated the space in Nigeria.

“And there were protests: subsidies should not be removed; they should be removed. The government at that time knew they were removing them; they should be removed. But the fact of the matter was, it went back on the process of removing them. When there were protests, it backtracked because there was an election coming. And so people swallowed the bitter pill. But somebody came and decided to swallow the bitter pill, to take the bullets on behalf of Nigerians.

“I think we should, in all sense of fairness and objectivity, give a commendation to whom it is due. If a man, who is a politician himself, who should be very sensitive to elections, decided to take the bullets, regardless of the consequences on his own political career, on behalf of the nation, because the nation had to be reset. I think it’s just very, very important for us to appreciate that.”

The Director of Strategic Communications for President Bola Tinubu’s 2027 campaign said Nigeria needs to stick to the economic reforms already started. He pointed out that tough decisions will bring challenges.

He said no government policy anywhere in the world can fully guarantee success, especially when it comes to human beings, who he described as the hardest part of economic growth.

The Minister of Solid Minerals also said that leaders should focus on policies that benefit the greatest number of people, even if some individuals enjoy the current system. He noted that the old fuel subsidy mostly helped rich Nigerians and fuel cartels, not the average citizen.

He added that despite the subsidy, Nigerians still complained about high transport costs. This raises questions about how much the policy truly benefited ordinary people.

He stated, “So the beneficiaries of the fuel subsidy were the oil cartels. They would buy the fuel at a lower price, cross the border, and immediately make humongous profits. And they come back to Nigeria to oppress the rest of us. So when the fuel subsidy was removed, did you think that they would fold their arms and be looking? No! They will fight back. They will push back. And they are fighting back, and they are pushing back.

“Now, at that time when there was a fuel subsidy, you recall how many states couldn’t pay salaries. In fact, the federal government itself was borrowing to pay salaries. And at some point, I recall, more than 18 states, if not more, could not meet wages. It was a tough situation. Money that should have been freed, you know, and put into use, into infrastructure and all that, constructing the regenerative sections of the economy, could not get the funds.”

The Minister of Solid Minerals said economic reforms need time to adjust. He pointed out that painful measures must be taken before we can see their benefits.

He mentioned that government policies do not give immediate results. They need proper planning, mobilization of resources, implementation, and monitoring before we can feel their impact.

The minister said the reforms introduced by the Tinubu administration are already showing the right results, despite the challenges and pains that come with them.

President Tinubu announced the end of the fuel subsidy on May 29, 2023, during his inauguration. This fulfilled one of his key campaign promises.

The decision caused a rise in the prices of goods and services. Yet, the All Progressives Congress-led Federal Government says the policy has brought important economic benefits.

As we approach the 2027 election, former Vice President Atiku Abubakar, who also promised to remove the subsidy during the 2023 campaign, has said he will restore it if elected. He cites the need to ease the hardship faced by Nigerians.

But the presidential candidate of the Nigeria Democratic Congress, Peter Obi, and the Allied Peoples Movement candidate, Oyo State Governor Seyi Makinde, have said they will keep the subsidy removal if elected in 2027. They promise better management of the petroleum sector to make fuel more affordable for Nigerians.